West Coast Bank Acquires Boston Startup That Helps You Pay Down Student Loans

After launching last fall, Boston-based student loan repayment platform Gradifi is getting acquired. San Francisco-based First Republic Bank announced on Monday that it has acquired Gradifi, which is now a wholly-owned subsidiary of the bank, with founder Tim DeMello remaining as its CEO. Gradifi's headquarters will remain in Boston, with additional employees in New York, Los Angeles, Palo Alto and San Francisco as part of the deal. The bank said there are extended employment contracts for DeMello and several other senior management members. Financial terms of the all-cash deal were not disclosed. Gradifi's platform lets employers make direct contributions to employees' student loans as an employee benefit — almost like a 401K, except for student loans — with the ultimate goal of helping employees reduce their overall repayment period and the total cost of their loans. It's also advertised as a benefit employers can use to improve employee retention. Gradifi's clients range from small businesses to larger enterprises, including PricewaterhouseCoopers, Natixis Global Asset Management, and Penguin Random House. “We completely support Gradifi’s mission in assisting with the country’s student loan challenge,” Jim Herbert, chairman and CEO of First Republic Bank, said in a statement. “They have become a market leader with their outstanding team, innovative repayment programs, and state-of-the-art technology.""As education costs and student loan debt continue to rise, offering a student loan repayment benefit for employees is increasingly valuable," Herbert continued. "Companies are realizing the power of a student loan repayment assistance benefit for both recruiting and retaining employees. As such, Gradifi has a terrific opportunity to assist companies and their employees.” The acquisition comes after First Republic implemented a student loan repayment assistance benefit for its own employees using the Gradifi platform earlier this year . “First Republic is the perfect partner to help Gradifi meet the growing demand for our student loan repayment solutions,” DeMello said. “In addition to its commitment to help manage student debt, First Republic’s focus on extraordinary client service aligns with our approach. With client satisfaction ratings that are on par with the world’s most respected brands, First Republic has the commitment to service and entrepreneurial culture, plus the financial resources, to power our growth strategy.”